Mrs Dean chaired the Mackenzie Sustainable Futures Trust, established to mediate between farmers and environmentalists over projects in the Mackenzie Basin and Waitaki Valley.
The trust was denied funding through the Ministry for the Environment's open tender Community Environment Fund, but was then directly granted up to $180,000 of ministry money.
Labour Party environment spokesman Grant Robertson said in a press release yesterday the deal reeked of special favours and cronyism.
He demanded an explanation of how and why the ministry granted funds to the trust, chaired by one of its members.
But Mrs Dean said Mr Robertson did not know what he was talking about.
"He's quite wrong.
"In order to make informed comment, he probably should have got himself out of Wellington and come to the South Island and had a look at the issues we face down here, in terms of the environment and differing agendas for the Mackenzie," she said.
Mrs Dean said as trust chairwoman, she formed and registered the trust and sought funding for work undertaken by an appointed working party - of which she was not a member.
"Of course there was no cronyism.
"I had to fight really hard to get money for this process and the funding I got from the Ministry for the Environment was by way of a deed of funding."
The ministry agreed to provide funding in return for "milestones" the trust would achieve, as well as for trust meetings, Mrs Dean said.
"It was very closely prescribed; in order to uplift those funds the trust had to provide evidence to the ministry such as invoices for disbursements.
"It's all public money and every cent of that money was used properly," she said.
The working party had produced a draft report including a shared vision for the Mackenzie, to be ratified by member groups and presented to the Government, Mrs Dean said.
